The World Bank is forecasting an increase in remittance levels for 2021, noting that this will be fuelled mostly by transfers to Latin America by migrants in the United States.
Remittances to low- and middle-income countries are projected to grow 7.3 per cent compared to 2020, the global lender asserted on November 17.
Transfers to Latin America and the Caribbean are forecast to have increased by 21.6 per cent year-to-date due to migrant’s worry about COVID-19 and hurricanes as well as improvement in the American economy and an increase in the number of migrants travelling to the US, it was outlined.
Originally, the World Bank had predicted a 20 per cent fall-off for 2021.
The World Bank said that remittance flows into Latin America and the Caribbean will likely reach a new high of US$126 billion in 2021, registering a solid advance of 21.6 per cent compared to 2020. Mexico, the region’s largest remittance recipient, received 42 per cent ($52.7 billion) of the regional total.
The lender said that the value of remittances as a share of gross domestic product (GDP) exceeds 20 per cent for several smaller economies: El Salvador (26.2 per cent), Honduras (26.6 per cent), Jamaica (23.6 per cent), and Guatemala (18 per cent).
The World Bank forecasted that in 2022, remittances are expected to grow at 4.4 per cent, mainly due to a weaker growth outlook for the United States.
The World Bank noted an increase in migrants to the US from South and Central America and the Caribbean due to push factors created by the spread of the novel coronavirus.